How Do I Fix Reject Code IND-507 on My E-File Return?

Filing taxes electronically can streamline the process, but taxpayers sometimes face issues such as reject codes. One common error is IND-507, which prevents successful e-filing and requires resolution before submission.

Invalid Social Security or ITIN

Reject code IND-507 frequently occurs due to an invalid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). The IRS uses these identifiers to verify taxpayer information, and any discrepancies can result in rejection. Taxpayers should cross-check their entries against official documents like Social Security cards or ITIN assignment letters to ensure accuracy. Even small typographical errors can trigger this issue.

Every individual listed on a return, whether a taxpayer or dependent, must have a valid SSN or ITIN. For instance, if a taxpayer recently changed their name due to marriage or divorce, they must ensure the name on the tax return matches the one on file with the Social Security Administration. Similarly, an expired ITIN must be renewed before filing. The IRS often notifies taxpayers of expiring ITINs, but renewing early can prevent delays.

Prior-Year Mismatch

A mismatch with prior-year data, particularly the adjusted gross income (AGI) from the previous tax year, is another cause of reject code IND-507. The AGI serves as a verification point for e-filing, and discrepancies can arise if the taxpayer amended their prior-year return but failed to use the updated AGI. For example, if a 2023 return was amended, the AGI from that amended return must be used for the 2024 filing.

IRS processing delays can also create mismatches. If the previous year’s return hasn’t been fully processed when the current year’s return is filed, it may cause errors. This is especially relevant for late filers or those whose returns were flagged for review. Taxpayers can avoid this issue by obtaining a transcript of their prior-year return from the IRS website to confirm the correct AGI figure.

Duplicate Return Attempt

IND-507 may also indicate a duplicate return attempt, which happens when a return with the same taxpayer information has already been submitted for that tax year. This often occurs unintentionally when taxpayers or preparers resubmit a return due to system errors or connectivity issues. For example, if an electronic filing system times out, a filer might unknowingly submit the return again.

The IRS detects duplicate submissions through unique identifiers like filing status and tax year. If a return with matching details has already been filed, subsequent submissions are automatically rejected. Taxpayers can confirm their initial submission was successful by checking the return status through the IRS’s “Where’s My Refund?” tool or their tax software.

Missing E-Filing Authorization

E-filing requires proper taxpayer authorization. The IRS mandates that taxpayers explicitly consent to file electronically, typically through IRS Form 8879, which serves as a declaration and signature authorization. Without this signed form, the return will be flagged with reject code IND-507.

For taxpayers using tax software, this authorization is usually integrated into the process, requiring an electronic signature using a PIN or password. Failing to complete this step results in rejection. This authorization is a legal obligation under IRS e-filing regulations.

Conflicting Dependent Data

Conflicting dependent data can also trigger IND-507. This occurs when two or more taxpayers claim the same individual as a dependent. Under IRS rules, a dependent can only be claimed on one return per year, except in specific cases outlined in Internal Revenue Code Section 152, which governs dependent eligibility. Tie-breaker rules prioritize factors such as relationship, income, and residency to determine which taxpayer has the right to claim the dependent. For example, in custody disputes, the custodial parent usually has the primary claim unless a written agreement specifies otherwise.

Taxpayers must have documentation to support their claim, such as birth certificates, school records, or proof of residency. Communication with other potential claimants, such as ex-spouses or family members, is critical to avoid disputes. If a taxpayer believes they have the rightful claim, they may need to file Form 8862, “Information To Claim Certain Credits After Disallowance,” to provide additional evidence.